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Wednesday, October 3, 2012

Developers say impact of increased RPGT not significant

KUALA LUMPUR: The increase in real property gains tax (RPGT) announced in Budget 2013 will not have significant impact on the property sector, according two developers.

Budget 2013 proposed a rise in RPGT from 10% to 15% for properties sold within the first two years and from 5% to 10% for those sold from three to five years.

Selangor Dredging Bhd managing director Teh Lip Kim told StarBiz: “The latest budget is all about reducing the deficit. To me, the rise is not that much.”

She said she did not see a slowdown in the property segment as a result of the RPGT increase and was confident of sales.

“I can only speak for myself. I don't see any problems in sales because the products we offer are different,” she added.

In a separate press conference, Dijaya Corp Bhd executive director Koong Wai Seng said the RPGT measure was “moderate.”

“I don't think most investors buy properties and hope to flip it within two years. So this 15% tax measure doesn't really worry us. If the RPGT had been increased for the later years, then yes, there would be some impact. On the whole, we are happy with the Government's move,” said Koong.

On the issue of affordable housing, Teh said that construction costs had gone up substantially largely due to rising material prices.

“I think it is the fluctuation in prices that is worrying the developers. Steel and concrete prices have not been stable and that leads to variations in construction prices.” She also attributed the current property prices to expensive land cost.

“What we should be mainly concerned about is infrastructure. If logistics and infrastructure were better, many people would not mind living further away,” Teh said, adding that the Mass Rapid Transit project was a necessity.

On the company shares that she had bought recently, she said: “I have been buying the shares since I became chief executive officer in 1998. It shows that I have confidence in the company.”

Teh had acquired 2.6 million shares at 71 sen each. Her direct interest in the company is at 17.52% and indirect interest at 40.03% as of Sept 18.

By The Star

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